Jeff Bewkes: Time Warner Wants VOD To “Create A Revolution” In TV

Seems that Time Warner CEO Jeffrey Bewkes sees little wrong with the entertainment business that can’t be cured by more video on demand. “That is clearly where the power of video content reaches its full realization,” he told investors today at the UBS Global Media and Communications Conference. VOD “has brought the vitality back to television. We’ll adjust all of the aspects [of Time Warner’s business] to realize that opportunity.” Indeed, he adds, “we’re trying to create a revolution in the way television rights are available.”

VOD hasn’t come as quickly or easily as he’d like. Bewkes continued to hammer cable operators for dragging their feet in offering VOD and TV Everywhere streaming. They’ve “paid for the programs. It’s all there. Let’s make it available.”

But Time Warner doesn’t want to mess with pay TV’s lucrative strategy that requires subscribers to pay for channels that they don’t watch. “There are about 100 million homes in America that have the multichannel package. It’s a tremendously successful package.” That’s why he continues to insist that he won’t play with fire next year when he begins to offer HBO Go’s streaming service directly to some consumers who don’t also pay for the expanded basic bundle. He’ll work with operators to offer it to about 10 million non-pay TV homes — including lots of millennials — as part of a low-priced package with broadband and broadcast channels. “It’s becoming painfully clear that [cable operators] are leaving money on the table,” Bewjes says. “It’s crazy to fly planes with nobody in the seats.”

Like many other moguls at the UBS confab, Bewkes rejected the thesis that digital services led by Netflix are largely responsible for the recent downturn in cable ratings, and weaker-than-expected TV ad sales. Nielsen’s audience measurement idiosyncrasies, and slowness to catch up with mobile viewing, accounts for “maybe a third or half” of the ratings drop. But “we don’t think that the viewing numbers you’re looking at are going to continue to be down. We don’t think it’s a secular trend.”

Bewkes also urged investors to look more kindly on the movie business which — while a much smaller contributor to profits than TV — frightens those who look at erratic box office results and the big decline in DVD sales. “We’ve been saying we’re going to do well for the last 10 years and we’ve done it every year.” Warner Bros’ success comes from its large pipeline and ability to develop franchises including Harry Potter and Lego, he says. The CEO also rejected a growing concern on Wall Street that audiences will become fed up with Hollywood’s production line of superhero movies including ones such as Superman and Batman from Time Warner’s DC Comics. “If you do good writing and casting development, these things are able to be part of the real world.”